ETH301 Business and Society
Week 2
"Corporate Governance, Legal, Regulatory, Political Issues, and Business Ethics"
This Week's Activities
Learning Objectives
•
1.
2.
3.
4.
5.
Analyze the rationale for government regulation of business
Reading & Assignments
Read "Weekly Related Articles"
Review Lecture 1 "Corporate Governance"
Review Lecture 2 "Government Regulation of Business"
Complete Discussion "Regulation of Business"
Complete Assignment "Business Regulations"
W2 Reading "Weekly Related Articles"
Weekly Related Articles
Corporate Governance
A Global View of Corporate Governance: One Size Doesn’t Fit All
http://knowledge.wharton.upenn.edu/article.cfm?articleid=674
Government Regulation of Businesses
Does government regulation really kill jobs? Economists say overall effect minimal.
http://www.washingtonpost.com/business/economy/does-government-regulation-really-kill-jobseconomists-say-overall-effect-minimal/2011/10/19/gIQALRF5IN_story.html
Regulation of Business – Good or Bad?
President Barack Obama ordered a review of U.S. regulations, both old and new, in a push to blunt criticism
from Republicans and businesses that excessive government is hindering economic growth.
http://www.reuters.com/article/2011/01/18/us-obama-regulations-idUSTRE70H13W20110118
Lecture 1 "Corporate Governance"
Corporate Governance
During this week’s mini lecture #1, we will be discussing corporate governance, its
benefits, as well as the design of a corporate governance system.
Corporate Governance can be confusing due the numerous definitions that are out
there, however, for our purposes, we will use the most widely accepted definition which
is a term that refers to the rules, processes, or laws by which businesses are operated,
regulated, and controlled.
Simply stated, it involves a set of relationships between a company’s leadership, its
board of directors, its shareholders and other stakeholders. Corporate governance can
also provide the structure by which the mission and vision of the organization are set,
and the means of attaining that vision.
Corporate Governance includes both social and organization aspects and encourages a
moral as well as ethical business environment.
Let’s briefly take a look at some of the benefits of
Corporate Governance:
•
•
•
•
Maintaining moral and ethical corporate governance ensures investors’ confidence, which can make it easier
for an organization to raise capital when needed.
It helps to create buy-in from the managers as well as the employees which is imperative to achieve the
organization’s mission and vision which are in best interests of both the shareholders and the organization.
It helps to ensure, as best as possible, the organization’s continued success and economic growth.
It helps to make sure that the organization is managed in accordance with the it’s mission and vision and is in
the best interests of all involved.
Let’s also briefly look at the 5 Principles of Corporate
Governance:
•
•
•
•
•
Shareholder recognition
Stakeholder interests
Board responsibilities must be clearly outlined
Ethical behavior
Business transparency
We are going to shift gears now and talk about some of the key issues to consider in
designing corporate governance systems.
With many of the world’s emerging economies looking for the right corporate
governance system to adopt, the first key issue to examine is which of the existing
governance systems already in place in the
advanced economies of the world is right for them. Which system is more optimal?
Which is more efficient?
Another key issue organization’s need to consider when designing a corporate
governance system, is to look at the choices that they can make in designing
governance systems and the impact those choices will have on executive level decisionmaking and the organization’s performance as a whole.
There are several other key issues, however, for purposes of our discussion, we will
focus on one more. A final key issue we will discuss is that governance is an
organizational discipline, meaning simply that organizational issues such as personal
and interpersonal dynamics between employees and leadership, cooperation, and
decision making.
References
Larcker, D. F. (2011, September 6). Corporate Governance Matters: Lessons for
Practitioners | Business Ethics. Business Ethics | The Magazine of Corporate
Responsibility. Retrieved February 17, 2012, from http://businessethics.com/2011/09/06/130-corporate-governance-matters-lessons-for-practitioners/
Sun, L. (2011, December 15). Why is Corporate Governance Important?.
BusinessDictionary.com . Retrieved February 17, 2012, from
http://www.businessdictionary.com/article/618/
Lecture 2 "Government Regulation of Business"
Government Regulation of Business
During this week’s mini lecture, we will be discussing the rationale for government
regulation of business as well as some of its benefits and costs.
Before we begin I have a question I would like you to think about for a minute. I want to preface this
question by stating that I am not taking a position for or against the regulating of businesses in this
lecture, I am simply stating my opinions along with facts and giving everyone something to think
about. My question to you is…should the government regulate business?
I imagine that most of you would answer "yes". However, if I were to ask you why, I
imagine you might have a difficult time giving me an answer that makes sense. Some of
you might say it’s to prevent businesses from misrepresenting themselves or doing
something fraudulent. But if you think about it for a moment, we don’t need the
government to regulate for this reason because we already have federal, state and local
statutes against this type of conduct. Businesses that behave this way are usually dealt
with through civil and criminal legal complaints. Some of you might suggest to me that
the government needs to regulate businesses to protect people from our stock market
collapsing. The truth is that there are far fewer stock market collapses than many of
you might think, and many of these so-called stock market collapses are actually a
result of well-meaning but misguided government regulation.
I want you to imagine something with me, just for a moment. Try to imagine a world
without any type of government regulation, but where all of the laws against stealing,
fraud, misrepresentation and violence against each other still exist. In this hypothetical
scenario, what do you think would happen to us if we did not have the FDA to tell us
what was safe to eat and drink, or anyone to protect us from unsafe products? Would
we all die? In my personal opinion, the answer is no, we would not. I say this simply
because I believe that our current legal system would more than likely protect us
equally, if not more, than we are now.
The regulation of businesses by the government is not a new phenomenon. Simply put,
the rationale for government regulations is to ensure safety of the public as well as to
ensure the success and growth of businesses.
As today’s business climate has become more technologically advanced and more
global, some say there is a growing need for more flexibility and less restrictive
regulations.
It has been said that government regulations are important for businesses because they
ensure best practices at every level of the organization.
The Government regulates businesses for three main
reasons:
•
•
•
Public welfare and safety
Protection from monopolies and unfair business practices
Revenue generation
The final part of government regulations I’d like to touch on briefly are the benefits and
costs of government regulations.
Benefits of government regulation of business
•
•
•
Effective government regulations can not only benefit consumers by protecting them from abusive business
practices, they also can benefit the businesses themselves.
They reassure the public, at times, that a particular product or food is safe. Take for example the recalls in
recent years of tainted beef, peanut butter, and cantaloupe. When news of this broke, sales of these products
drastically fell even for producers whose products weren’t even affected by the contamination.
Government oversight of the environment, safety, health, financial, and other risks of business activity can
safeguard consumers.
Costs of government regulation of business
•
•
•
For businesses to complying with federal regulations, it has increased their businesses’ expenses by millions
of dollars each year. Some of this cost comes out of businesses’ profits, but most of these costs are passed
down to us, the consumers, in form of higher prices.
It can slow economic growth and hamper job creation.
Regulation requires more resources from a business for the same amount of productivity, which causes an
increase in the cost of production, and an equal increase in the price of the product.
References
Rahn, R. (2005, August 10). Why do we regulate? Lower Taxes, Less Government,
More Freedom. Retrieved February 21, 2012, from
http://www.freedomworks.org/publications
ETH301 Business and Society
Week 2
Assignment "Business Regulations"
Business Regulations
•
•
•
•
•
•
•
•
Identify one agency, bureau or department within the federal government responsible for upholding
regulations that impact business operations. A few examples are the Environmental Protection Agency (EPA),
Internal Revenue Service (IRS), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) or Department of
Commerce. Research and explain the purpose of the agency, bureau and how it directly impacts business.
The requirements below must be met for your paper to be accepted and graded:
Write between 750 – 1,250 words (approximately 3 – 5 pages) using Microsoft Word in APA style, see
example below.
Use font size 12 and 1” margins.
Include cover page and reference page.
At least 80% of your paper must be original content/writing.
No more than 20% of your content/information may come from references.
Use at least three references from outside the course material, one reference must be from EBSCOhost.
Text book, lectures, and other materials in the course may be used, but are not counted toward the three
reference requirement.
Cite all reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) in the paper and list
on a reference page in APA style.
References must come from sources such as, scholarly journals found in EBSCOhost,
CNN, online newspapers such as, The Wall Street Journal, government websites, etc.
Sources such as, Wikis, Yahoo Answers, eHow, blogs, etc. are not acceptable for
academic writing.
A detailed explanation of how to cite a source using APA can be found here (link).
Download an example here
Grading Criteria Assignments
Meets or exceeds established assignment criteria
Demonstrates an understanding of lesson concepts
Clearly presents well-reasoned ideas and concepts
Uses proper mechanics, punctuation, sentence structure, and spelling
Total
Maximum Points
40
20
30
10
100
Purchase answer to see full
attachment